Accuri Cytometers, Inc. was founded to address a compelling need: life scientists love the rapid cell-by-cell analysis capability of flow cytometers, but too few have a flow cytometer in their lab. The barriers for most researchers include cost of the instrument, complexity of the software, effort required for maintenance, and the large amount of bench space required for the instrument.
[Accuri Cytometers Website, About Us]

"Accuri Cytometers, was born out of a professor's idea to use microfluidics to detect bacteria in machine tool fluid, which can make workers sick. The Detroit Three and the United Auto Workers were behind the original idea. Eventually, though, the business types who were leading the commercialization effort figured out that the idea wouldn't work as an inexpensive way to detect nasty bugs on factory floors — but it would work as a desktop cell analyzer, "a low cost way of analyzing bugs period, so instead of a quarter million dollar machine, we can make one for $25,000," Nisbet said. Accuri Cytometers was born, and detailed cell analysis went from room-size to desk size, and the cost fell by 90 percent."

The more you look at Becton, Dickinson & Co.’s (NYSE:BDX) recently completed acquisition of Accuri Cytometers in Ann Arbor, MI, the more there is to like. Even savor.

BD did not disclose financial terms, which is a little annoying since the medical device and equipment maker, based in Franklin Lakes, NJ, had no problem telling the world it paid $275 million for HandyLabs, another Ann Arbor startup, in 2009.

But thanks to a helpful source with knowledge of the situation, I learned BD paid $205 million for Accuri, a University of Michigan spinoff that makes sophisticated machines that count cells. That means BD has dropped nearly half a billion dollars on two Michigan startups in less than three years.

And BD, which reported $7.35 billion in revenue last year, paid a hefty premium for its latest conquest.

I previously estimated Accuri, a private company, generated about $25 million in annual sales on the low end, based on some previously disclosed sales figures and product pricing.

From what I can tell, my most conservative estimate, admittedly an unscientific calculation, wasn’t too far off. So based on Accuri’s $205 million sale price, BD paid at least 10 times revenue, about two to three times what a similar company would fetch on the market.

What helped Accuri was that BD was bidding against other buyers, my source says, which likely drove up the price.

I’m not smart enough to say whether BD paid too much for Accuri. But I do think Accuri’s multiple suitors says something about the quality of its business. It’s not like buyers are tripping over themselves to overpay for medical device companies, or any healthcare firm, these days.

In 2010, global healthcare-related mergers and acquisitions totaled $235.4 billion, up just 1 percent from the previous year, according to Dealogic. For the first three months of this year, healthcare deals totaled $39.3 billion, a 49.4 percent decline from the same period in 2010.

The Accuri transaction spread a lot love across Michigan, starting with Ann Arbor-based Plymouth Venture Partners, which owned 6.2 percent of the company, and Arboretum Ventures, also in Ann Arbor, which participated in three rounds of financing.

But the biggest winner may be the humble civil servant.

If you’re a public worker, there hasn’t been a whole lot to cheer about these days- budget deficits, pension shortfalls, fierce political attacks on public unions.

But Michigan teachers, police, and state employees can enjoy some bit of good news. Their pension funds owned unspecified stakes in Accuri through both Arboretum and InvestMichigan! Growth Capital Fund.

Accuri represents the first cash return on investment for InvestMichigan, which was created in 2008 by then-Gov. Jennifer Granholm to bankroll emerging Michigan companies. Its portfolio of 19 companies include Pioneer Surgical Technologies, gloStream, and Sakti3.

InvestMichigan generated a return “greater than 4.5 times” its investment in Accuri, according to Bob Payne, In-House State Investment Specialist with Credit Suisse Customized Investment Group, which manages the fund with Beringea Group. Payne declined to disclose the exact size of the fund’s stake in Accuri.

Accuri’s benefits to Michigan apparently won’t end with its sale price. BD, which drew criticism from closing HandyLab’s office in Ann Arbor, will reportedly soon establish some sort of presence in town, though it’s not clear whether it will be a separate office or Accuri-related operation.

Franklin Lakes, NJ (March 18, 2011)—BD (Becton, Dickinson and Company) (NYSE:BDX), a leading global medical technology company, today announced the completion of its acquisition of Accuri Cytometers, Inc., an Ann Arbor, Michigan-based company that develops and manufactures personal flow cytometers for researchers.

The acquisition expands BD’s presence into the emerging affordable personal flow cytometer space, and helps expand the use of flow cytometry technology by researchers in regions of the world where ease of use and affordability are critical.

“The acquisition of Accuri Cytometers complements and broadens BD’s offerings for life scientists by making flow cytometry more accessible to a wider audience of scientists and clinicians,” said William Rhodes, President, BD Biosciences. “This includes researchers in scientific disciplines that have not traditionally used flow cytometry, such as environmental sciences, microbiology and marine biology.”

The financial impact of the acquisition on fiscal year 2011 earnings has been incorporated into the guidance BD provided during its earnings call on February 8, 2011.

New Jersey-based giant Becton, Dickinson and Co. said this afternoon that it had reached a deal to acquire medical device firm Accuri Cytometers, one of the Ann Arbor region's most promising tech companies.

Terms of the deal were not disclosed, but the transaction is expected to be finished in BD's third fiscal quarter of 2011, which lines up with the spring.

Accuri Cytometers co-founder and former CEO Jen Baird helped the company top $10 million in sales in 2009. She resigned in January 2010.

The deal is sure to inspire fears among the Ann Arbor business community that BD may shutter Accuri's Scio Township operation, which employs about 85 workers, including more than 60 in Scio, and manufactures the device. Accuri had some $20 million in sales in 2010, nearly double what it had in 2009.

BD paid $275 million to acquire Pittsfield Township-based medical device firm HandyLab in late 2009 only to announce in October 2010 that it would close HandyLab's Pittsfield operation by summer 2011.
In a news release this afternoon, BD gave no indication about its plans for Accuri's Scio Township operation. But sources indicated that BD wants to invest in the company's local operation for the long term.

Asked to address the status of the company's local operation, BD spokeswoman Colleen White said, "I don’t have a lot of details at this stage, but I can tell you our current plan is to continue to operate the Ann Arbor facility."

BD said it would provide more details about the acquisition in a call with investors at 10 a.m. Tuesday.
"Accuri Cytometers' offering of flow cytometers for a new audience of researchers will complement and broaden BD's current offerings for life scientists," said Vincent A. Forlenza, BD president and chief operating officer, in a statement. "We believe that, once completed, this acquisition will enable BD to further contribute to medical and scientific advances, in line with our corporate purpose of helping all people live healthy lives."

The sale is sure to reap a windfall of profits for a range of venture capital investors, including Ann Arbor-based Arboretum Ventures and the InvestMichigan! Growth Capital Fund, a program managed by Credit Suisse using funds from the state of Michigan's pension portfolio.

Accuri's flow cytometry device is a system that helps doctors and researchers analyze cells more efficiently and cost effectively.

Tim Petersen, managing director of Arboretum Ventures and a member of Accuri's Board of Directors, described the deal as a "great outcome." Petersen, whose firm was also an investor in HandyLab, declined to offer details but said he was optimistic that Accuri would not meet the same fate as HandyLab.

"I think there's a tendency for people to be more skeptical and rightly so," Petersen said. "We just have a much more substantial manufacturing operation here. We're further along in the commercialization. It's my understanding that there should be more optimism."

Petersen said Arboretum reaped five times its investment in Accuri, though he declined to say how much that was.

Accuri's founders, Collin Rich and Jennifer Baird, built the University of Michigan spinoff company into a coveted technology company and a symbol of the Ann Arbor region's startup prowess.
The firm was held up in advertisements and commercials by the Michigan Economic Development Corp. as emblematic of the opportunities in the region.

Baird, who could not be reached for comment, is now CEO of Pittsfield Township-based wind energy device Accio Energy. She led Accuri as CEO until resigning in January 2010 and handing the reins to Jeff Williams, the former CEO of HandyLab, who was credited with leading HandyLab to its blockbuster sale to BD.

Williams told AnnArbor.com this afternoon that "we're very excited" about Accuri's sale.
"BD's a high-quality company," he said. "We really coveted their global distribution and this is a great way to get access to it."

BD was long viewed as a possible suitor for Accuri because the company's flow cytometry device fits well in BD's technology portfolio. BD has $7.37 billion in annual revenue and more than 28,000 full-time employees.

In October, BD said it would consolidate manufacturing of HandyLab's rapid infection-detection device into an existing facility on the East Coast. The company described the move as a logical, cost-saving measure. Of HandyLab's roughly 50 employees, some were given the chance to transfer to the new operation.

Like at HandyLab, Accuri's employees hold stock options in the company -- and they will profit from the sale to BD.

Those stock options "will become quite valuable once the transaction" is complete, Williams said.